Striking staff and rising debt push Kingfisher Airlines to the brink

By Salil Panchal / AFP, MUMBAI

Sun, Oct 14, 2012 - Page 14

Frustration and anxiety are etched on the faces of staff at India’s grounded Kingfisher Airlines as they gather at Mumbai’s domestic airport each morning — not to work, but to vent their anger.

On strike to demand wages that have not been paid for up to seven months, workers told reporters how they were struggling to provide for their families, with little cause for optimism that the debt-ridden company will honor its debts.

“I’ve been borrowing money from friends who now work in overseas airlines,” said a 26-year-old engineer and sole breadwinner of his family who said he was struggling with his mother’s medical bills for a knee problem.

Banners waved by the protesters — mainly pilots and engineers — lampoon the cigar-puffing billionaire tycoon who owns the airline, Vijay Mallya, known as “the King of Good Times.”

One poster shows the liquor baron sitting on a toilet seat and the hands of Kingfisher employees collecting his excreta in a begging bowl.

At a gathering on Friday, many spoke grimly of the news in that morning’s papers about the wife of a Kingfisher technician who hanged herself from a ceiling fan in New Delhi. A suicide note blamed financial stress, police said.

“How many more deaths does the airline want?” said an emotional engineer, adding that he had sold off his family’s gold ornaments and insurance policies and taken loans from friends to provide for his loved ones.

“We have supported the airline for the past year, during its tough times. Look at the reward we have got,” he said, declining like others to give his name for fear of reprisal.

Loyalty to the firm still remains, the engineer said, but the 4,000 or so employees — none of whom have been paid since April and some for longer — want their pay.

Relations between the management and its staff reached boiling point last month after a series of meetings at which Kingfisher declined to commit to when it would settle its dues, leading employees to refuse to work.

The carrier grounded its fleet last week and declared a partial lock-out, blaming “recalcitrant employees.”

India’s airline regulator has since warned that the license for what was once India’s second-biggest airline might be revoked.

With the suicide and protests, criticism is increasingly directed at Mallya and the contrast between his lifestyle and those of his employees who have stuck by the airline while others have joined the competition.

“If some of you think canceling flights, speaking to media, or disgracing our company will produce cash and salaries, you are wrong,” said a blunt written message he delivered to staff in May.

Kingfisher CEO Sanjay Aggarwal has also come under fire, depicted by posters as “criminal executive officer” after reports of his US$760,000 pay packet for the year to March surfaced. Yet he too has reportedly not been paid since April.

“We have seen the good face of Mallya and now we’re seeing the bad one,” one striker said.

However, while the tycoon’s empire — spanning beer, whiskey, a cricket team and fertilizers — is not seen as in doubt, recent moves suggest he too is facing a financial crunch.

His flagship United Breweries, India’s biggest brewer, is in talks to sell a stake of the profitable liquor empire to Diageo, the world’s largest distiller, which analysts say could raise US$800 million.

The 56-year-old is also desperate for a foreign airline to pump fresh capital into Kingfisher after India relaxed its investment policies. Yet analysts are doubtful anyone will come forward to rescue a company drowning in a debt pile estimated at US$2.49 billion.

“Employees reflect the personality of an airline and when morale has been extinguished ... it is akin to operating an airline without a soul,” said a report on Kingfisher from the Center for Asia Pacific Aviation, an aviation consultancy.

The airline, now India’s smallest, has until Saturday next week to respond to the regulator and demonstrate that it is a “safe, efficient and reliable service” or risk being shut down. For employees, too, time and patience is running out.